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Saturday, June 16, 2012

TPPA and NZ

The
investor dispute clause

When a dispute arises between the NZ Government and
the Foreign Investor, the Foreign Investor under the investor dispute clause,
will be able to sue the NZ Government. In effect, the Foreign Investor is suing
the people of NZ, since any monetary remedy will be plucked form the taxpayer
purse, and any other remedy, likely to be legislative will be despite the views
of NZ public, thus overriding the democratic will of the people who voted MP’s
into Parliament. On the other hand, the New Zealand companies investing in foreign
countries will also be able to sue under an investor dispute clause.

So what’s the problem? While there are no disputes
there is no problem. And the likelihood of a dispute exhausting all appeals
resulting in a binding remedy is probably very low. However, that in itself
raises other questions. For instance, what concessions would the government be
prepared to make to avoid arbitration?

Consider the example of the Crafar Farm sales to
Chinese investors. Under the NZ-China Free Trade Agreement (FTA), if the
government had determined that the farms should be sold to NZ investors, this would
have provided the Chinese investors an opportunity to sue the NZ government
under the investor dispute clause in the FTA. How? The FTA has a provision
called the ‘National Treatment’ clause, which essentially means that the host
government (NZ) cannot give preferential treatment to New Zealand investors
over Chinese investors. Whilst there are some exceptions, such as the ‘public
interest’ which could potentially be decided in NZ’s favour, the cost of
arbitrating the matter is extremely expensive with no guarantee that the scales
will tip in favour of NZ. It surprises me that this clause has not been
discussed in the mainstream media and should be given more consideration than
it currently is. That is not to say that the relationship with China isn’t an
important one. This is simply an example of how and when an investor dispute
clause could be triggered.

Now consider the partners in the TPPA, the most
dominant one being the US. US companies are prolific litigants. So how does NZ
fare against a giant US conglomerate? Our current economic position puts NZ at
a massive disadvantage, so why on earth would the government sign up to a
Treaty that risks further destabilising the economy? Well, in short, they won’t
let it get to that point. Instead, they will make deals with those companies by
ramming through legislation with their 1 seat majority, which leads to my next
point – the democratic will of Parliament.

The democratic will of
Parliament

In NZ, laws can only be passed by majority in Parliament. The
issue here is that the majority that will be voting through any legislation, is
marginal - a majority by a single seat. It might be the law, but it is a law
that needs further consideration since it seems hardly democratic when that one
seat that holds the balance of power is only in Parliament because they won
their election seat through the puppeteering of the National Party.

NZ politics has forgotten that it is the people who empower Parliament.
Citizens have forgotten that it is they who empower Parliament. So when
parliament votes on law, they are voting on behalf of those who elected them as
representatives. But, it is apparent that today’s politicians represent their
own will and agendas, particularly the current government that claims the
people gave them a mandate. For a government who claim to be the supreme number
crunchers, they failed to realise that 53% of those who voted, did not vote for
National and therefore there is no mandate. The argument that those who didn’t vote
indirectly gave National a mandate is flawed. There is no logical connection
between a person not voting equating to a vote for National.

I could go on to asset sales from here but will leave that for
another discussion.

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About Me

The views expressed are my personal views. Some views will be well researched while others will be reactionary. Where appropriate I will provide references to material. Prone to inconsistencies over time. Feel free to hit me up about it.